Societe Generale has now started shedding jobs in Singapore

Societe Generale has cut back its commodities unit in Singapore as Asia starts to feel the effects of the bank’s plan to make 1,600 redundancies globally. Earlier this month SocGen laid off five salespeople working in its 11-strong OTC principal commodities team in Singapore, says a source with knowledge of the cuts, adding that the business has been shuttered for new trades.

The remaining six team members have been reassigned to prime brokerage or are managing existing OTC commodities trades (which SocGen continues to honour) for about another year, she adds. SocGen has retained its listed agency commodities business (i.e. clearing) in Singapore, so it is not exiting the sector entirely.

About 850 of the 1,600 job losses at SocGen will be outside of France, including in Asia. SocGen would not comment on its Singapore commodities team. A Hong Kong-based spokesperson said the firm is not providing a breakdown of the cuts by business unit, service unit or country.

The commodities redundancies appear to have surprised those affected. Bonuses for the team had already been paid, and are understood to have been strong. “The feeling was ‘we’re doing a great job, so why are you letting us go?’ People also asked why it was done so abruptly,” says the source. “There’s at least some justification for this point of view – the OTC principal commodities team was making good profits in Singapore. And rumors about the cuts only started circulating about a week beforehand – there wasn’t much warning.”

But the SocGen team’s “cost/revenue ratio was high” and the OTC commodities market in Singapore has been “stagnating” for about the past five years, says the source. Goldman Sachs cut commodities jobs in Singapore last month, for example. “You could keep the team running, but it would probably never have got into fifth gear.”

Still, five jobs is small change when SocGen is culling hundreds of non-French roles. More redundancies are likely to follow in Asia. At-risk functions potentially include back and middle-office commodities, fixed income, and “non-core” Asian businesses, such as payments in China, says the source. “There’s a focus on making certain departments leaner and more efficient,” she says.

“The current uncertainty around SocGen jobs in Asia has slightly affected morale at the bank,” says the source. “But I only expect this uncertain environment to last until about early Q3 – by then we should know more about the bank’s plans for Asia.”